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AT&T's customer ratings slump as it faces iPhone loss

AT&T's challenges mount, as it faces the loss of its iPhone exclusive just as its customer ratings plummet

By PETER WHITE

Published: 9 December, 2010

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AT&T's challenges mount, as it faces the loss of its iPhone exclusive just as its customer ratings plummet. The latest Consumer Reports study shows AT&T as the major cellco with the worst reputation among users. Verizon's crown has slipped slightly too, but it will still be able to lure significant numbers of iPhone lovers, once it has its own version of the handset, on the basis of superior network and customer satisfaction.

The annual survey usually puts Verizon at the top, but this time regional carrier US Cellular pipped it to the post. In another surprise, Sprint drew close to its CDMA rival, showing that its heavy focus on improving customer service over the past two years is bearing fruit.

US Cellular, which provides service in 26 states, gained top marks for value, voice service and customer support, and the overall best score for user satisfaction among 58,000 respondents. The carriers have all been working on improving their user experience, network quality and customer support, as competition gets tougher, and most saw their scores improve or stay around the same as last year. Only AT&T's dropped significantly, even though the worst of its problems with iPhone outages and other well publicized issues came during 2009 - this year, it has invested heavily in improving its network performance.

Sprint, by contrast, was showing signs of a turnaround, beating Verizon on some aspects of customer service, previously its Achilles' heel. T-Mobile came slightly behind Verizon and Sprint and well ahead of AT&T.

Even more alarmingly for the leading GSM operator, given the presumed loss of its Apple exclusive in the first quarter of 2011, its iPhone users were the least happy. More than half of the AT&T customers surveyed had an iPhone, but these were far less happy with the carrier than owners of smartphones on other networks. Their biggest gripes were about data service.

"Our survey suggests that an iPhone from Verizon Wireless, which is rumored, could indeed be good news for iPhone fans," said Paul Reynolds, electronics editor at Consumer Reports.

AT&T remains insistent that it can minimize the impact of a Verizon iPhone by expanding its own smartphone portfolio and tying Apple users into family plans. The operator's CFO Rick Linder said, at the UBS Global Media and Communications conference this week, that the firm was expanding its smartphone portfolio still further than it has done this year. It will diversify its line-up with Android, Windows and BlackBerry handsets (though he did not mention Symbian, once expected to be a mainstay of AT&T's range, and a way to differentiate).

"At some point, as it does with all exclusive arrangements, the exclusivity arrangement ends," Linder said. "It's important to support all the major operating systems, particularly those devices on the higher end that tend to be more data intensive."

He argued that AT&T's "absolutely blow-out quarter" for the iPhone in Q3 was a "positive vote of confidence" from customers, even though they were aware there could soon be another iPhone carrier.

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